Discovery Inc officially closed the acquisition of AT&T’s WarnerMedia unit on Monday. The joint firm, Warner Bros Discovery (NASDAQ: WBD) debuted at a per-share price of just over $24 this morning.
Deutsche Bank sees 100% upside in WBD
Following the merger, Deutsche Bank named WBD a “top pick” in the media sector and attached a price target of $48 to the stock that represents about a 100% increase from here. Analyst Bryan Kraft wrote:
WBD is one of the best positioned in global streaming video entertainment industry given its content and IPO portfolio, combined with widely recognized HBO MAX brand and existing base of 92 million streaming subscribers.
The bank sees Warner Bros Discovery as the #1 in both scripted and unscripted content. It expects 194 million global direct-to-consumer subscribers for WBD by the end of 2026.
WBD has opportunity in ‘international’
Also on Monday, Michael Nathanson – a senior research analyst at MoffettNathanson said the opportunity for the combined company is in “international”. On CNBC’s “Squawk on the Street”, he noted:
The opportunity here is outside the U.S. The United States is really competitive for streaming. Discovery has a very strong position outside the U.S. HBO has been slow to move there. We want to see what they’ll do to build the international HBO MAX products.
Nathanson sees some downside in WBD in the near term as AT&T shareholders pull out of the stock. But he says the dip will pose an even better opportunity to buy Warner Bros Discovery.
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